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Thoughts on the Current Economy

MissingMoney.comIt appears from what we hear in the media that everything is falling apart and that we are heading towards the worst depression we’ve ever had.

It seems like only a month or two ago, the economy was fine… about a year and half ago the economy was the greatest it’s ever been. How things change, or should I say perceptions. I believe that the reality is somewhere in between. I think that the media has played a very big part in how people feel towards the economy and their own finances.

I think that a month or so ago the economy wasn’t as bad as the media made it out to be. There were a small number of people that had really over leveraged themselves into debt to buy homes they could not afford. The banks leveraged themselves to loan money to these people due to pressure from the federal government, to make it easier for more people to be home owners. While it may seem like a nice idea, its not practical for many people at their current financial condition.

However, the media made it seem like EVERYONE was in trouble, thus causing panic and people to sell the stock of any financial company, causing more problems for the banks causing ripples through the whole market.

Then the news of this caused many who have retirement money at stake to get scared and sell their shares, causing more panic and more selling and now you have people so scared that they are sharply cutting back on spending, which is then in turn causing the potential for the panic to actually cause a real economic crisis. It has the possibility of becoming a self-fulfilling prophecy.

The government feels the solution is to print more money, which could work in the short term, but it doesn’t appear to be. If banks are not confident enough to loan it, it doesn’t matter how low the interest rate is. If business people are not confident enough, they will not invest time and money into expanding their businesses, creating new products and services. People need to be assured that things will be ok.

The point is that if enough people really believe that everything is going to hell, it will… if people think that we are strong enough to get through it, we will.  It’s up to the people.

However, what happens when people are confident again, when all this new money has been put into the market. When people sold all their stocks and commodities contracts prices of everything dropped dramatically, everything from the price of a company’s stock, corn, and oil. This has recently made the dollar appear to be strong again. Once people are confident again, all that money will flood back into the market causing all these things to go up in value once again and most likely surpase the highs we had earlier this year resulting in massive inflation.

Essentially, the government is offering all this easy credit/ free money to solve a problem that was caused by the very same easy credit/ free money that caused the problem in the first place.

I suggest that people make the best of this situation. When you get your tax refunds, bailouts, tax rebates, etc., put the money to good use. Make your own finances stronger by paying off your debt, put as much money away that you can for your future, cut back where you can, and make sure that your finances are sustainable.

I personally feel that the weakness in the economy is temporary. I think that pessimism has been over done and we will recover as a country just as we have from all our other economic crises’.

However, I do believe that due to way the federal government/ federal reserve manages our money supply, inflation is with us for good… it will always rise over the long run.

I also believe that our country is full of really great companies that will survive short term problems and will emerge stronger than ever and thrive again. Therefore, I believe that in the long run keeping some money invested with high quality companies is a great idea, especially at current prices. While difficult to predict a bottom, I am confident that 10 years from now, people will be much better off being invested in something solid such as a high quality business or other asset is better than having everything in cash, which has no real inherent value.

Everyone be strong, have faith in yourself and others, and keep safe.

Satirical Political Beliefs Test

I was emailed the following satirical political quiz that you may enjoy…

A SATIRICAL POLITICAL BELIEFS ASSESSMENT TEST: A Humorous Political Party Quiz to Test If You’re an Archconservative, Leftwing Wacko, Antigovernment Libertine or a Commie Sympathizer

Five Sample Test Questions Follow: ==========================================

Key to abbreviations in test questions that follow:
CONS: Conservative (Archconservative)
LIBL: Liberal (Leftwing Wacko)
LBRT: Libertarian (Antigovernment Libertine)
COMM: Communist (Commie Sympathizer)
==========================================

1: Government’s practice of stealing from the rich to give to the poor is…
CONS: a crime.
LIBL: a brave, generous and heroic deed.
LBRT: a foolish, misguided attempt at social engineering.
COMM: an inspiration to us all.
==========================================

7: The Center for Public-Health Dietary Self Control releases a study that says eating just one jelly donut is as harmful to human health as smoking 10,000,000 cartons of cigarettes. Do you…
CONS: keep eating jelly donuts.
LIBL: demand that jelly donuts be removed from vending machines, and public school cafeterias.
LBRT: hoard jelly donuts before they are regulated off grocer’s shelves.
COMM: hoard jelly donuts so you can sell them on the black market.
==========================================

10: What techniques are best for maintaining discipline in the classroom?
CONS: If just one student misbehaves, severely punish the entire class.
LIBL: Force boys who refuse to settle down to take psychotropic drugs, such as Ritalin and Prozac.
LBRT: Anyone who doesn’t want to be in class can leave.
COMM: Anyone who doesn’t want to be in class can be made an example of.
==========================================

20: What’s the best way to stop people from illegally crossing our borders?
CONS: Seal the borders so no one can get in.
LIBL: Do nothing to beef up security at the borders, and offer illegal aliens a wide array of free services.
LBRT: Allow unrestricted passage across the borders.
COMM: Seal the borders so no one can get out.
==========================================

21: How would you define the word “profit”?
CONS: What business owners earn by selling a quality product at a competitive price.
LIBL: What business owners RIP-OFF from their customers.
LBRT: What business owners are rewarded with for risking the loss of their own money.
COMM: What business owners RIP-OFF from their employees. ==========================================

Click on the Web Link below to read my entire http://www.geocities.com/donaldjhagen/humoroustest.html

New Show: American Socialism For The Rich

Filmed on July 20th of 2008, hosts Marek Hirsch and Matt Cropp discuss monetary policy, fiat currencies, and the role of government in stimulating the economy.

Tuesdays @ 4:30pm, Wednesdays @ 7am, Saturdays @ 5:30pm and Sundays @ 7pm (LIVE) on Channel 15 (VCAM) on Burlington Telecom and Comcast (Burlington, South Burlington, Essex Junction, Essex Center, Williston, Winooski, St. George, parts of Colchester, Shelburne, Charlotte, Hinesburg, Ferrisburg & Vergennes).

This is a show taped in Vermont weekly so, feel free to call in Sundays from 7PM to 8PM EST. The phone number is (802) 658-0589. Below is the first pilot episode…

Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9.

State of Vermont has $42 Million of Your Money

MissingMoney.com

Vermont is said to be sitting on over $42 Million in abandoned/ unclaimed property (uncashed certified checks/money orders, dormant bank accounts, and refunds) that are never redeemed.

By law, Banks and insurance companies are required to give the money to the state if they cannot find its owner. This is supposed to make it easier for people to find all the money is that owed to them in one place.

To see if Vermont go to:
http://www.vermonttreasurer.gov/unclaimed/index.html

Outside of Vermont:
http://www.missingmoney.org/

Simply enter your name and state and search.  To check for relatives, you can just enter your last name and state and it will bring up all people with the same last name.

However, it appears by the growing amount of money being unclaimed that most people don’t know they have money waiting for them, or they don’t care, or they may find it to difficult to claim?

Wallace Nolen, a Barre, Vermont resident, has stated that the state and banks are not doing enough to get the money back to the rightfull owners.

Nolen contends that Vermont’s program is as insufficient, and keeping the money for the state is a powerful incentive not to locate its owners. Lists could be posted in more locations and official mailings sent to people before and after their money goes to the state, he said.

I’m not sure why the state cannot simply mail the payment or notice to people as they have their addresses on file.

I can certainly see that there would be a great incentive for the state to not have people claim the money as while the money is in their possession they can spend it or invest it to make more money for the state.  For example, with $42 million dollars, they could invest the money in quality bonds at 6% earning an extra $2.52 million/year… not bad.

If the concern for notifying people of their unclaimed money is costs, the state could use part of the $2.52 million to locate the people and provide them their money and bank the remainder to help pay for future expenses of dispursing unclaimed funds or the state could charge a fee to cover the costs per claim.

The Woodchuck Report – 7/11/2008

The latest podcast for The Woodchuck Report is online.

Topics include Moran Plant redevelopment update, Vermont tax holiday, Burlington increases parking fees, What to do with sex offenders?, Vermont doctors receiving funds from drug companies, Shooting case ruled self defense, Vermont increases limit of raw milk purchases, Vermont Compost ordered to cease composting operations, Solar Fest, Elections, Douglas signs legislation to allow “Virtual Corporations” and more.

Vermont Allows Farmers to Sell More Unpasteurized Milk

Milking Cow

The state of Vermont has increased the limit on unpasteurized milk that farmers can sell to the public from 25 quarts to 50 quarts per day. Also, the farmers will now be allowed to advertise it. However, the milk still cannot be sold in stores, you need to buy it direct from the farmers.

Although, many of the farmers affected were hoping for the limit to be lifted altogether, this is seen as a step in the right direction.

John Clark of Applecheek Farm, one of the farmes who sells unpasteurized milk, had this to say…

“Hopefully, it can expand so consumers can have a choice and farmers can have a choice,” said Clark. “Farmers can have the choice to sell it and consumers can have the choice to buy it without limitations, and let it be a consumer and farmer relationship choice and not a bureaucratic choice.”

From what I’ve read and heard, it appears a lot of the opposition to the sale unpasteurized milk is due to the perceived dangers of the milk. However, there are a lot of people that believe that there are many benefits to consuming unpasteurized milk. Many people can debate well for one side or the other. I will not get into the debate here as that is not the point. The point is why can’t people be allowed to choose which milk they prefer? People are freely able to purchase as much organic food or pesticide-based food? Both sides have good arguements for their case too. I guess the unpasteurized milk farmers don’t have as good a lobby as the organic crops farmers or pesticide companies do.

I don’t see why consumers cannot be allowed to buy whichever milk they prefer with limitation. You can have milk labeled or advertised as FDA Approved and non-FDA Approved or pasteurized and unpasteurized. As long as consumers are informed as to what they are buying and they choose based on their own free will, what is the problem?

Decisions like this should really be left between the people and the providers and government should get out of the way.

Ron Paul on Personal Freedoms and the Internet

Ron PaulRon Paul’s latest blog entry Personal Freedoms and the Internet addresses the concerns he, as well as most libertarians, have regarding legislation like the Unlawful Internet Gambling Enforcement Act. Paul argues that this will lead to much more government regulation of the internet which would be bad for the internet. Paul states “The internet must remain a government-free zone to maintain its integrity and usefulness to modern society”.

Paul goes on the argue that on a larger scale if we as Americans are not free to make mistakes, we are not really free. The full quote is below…

“The most basic principle to being a free American is the notion that we as individuals are responsible for our own lives and decisions. We do not have the right to rob our neighbors to make up for our mistakes, neither does our neighbor have any right to tell us how to live, so long as we aren’t infringing on their rights. Freedom to make bad decisions is inherent in the freedom to make good ones. If we are only free to make good decisions, we are not really free.”

Of course, excessive online gambling (or state lotteries for that matter) is a problem, just like many other things can be considered irresponsible or not in a person’s best interest, but if someone is doing something that doesn’t hurt or defraud others, how is it that anyone has the right to get in their way?  How can you say that you are truely free if you are not able to make those decisions for yourself?

The best way to help people overcome bad habits is through education, which unfortunately I believe is lacking in this country, particularly with in the financial area. 

We could solve a lot of financial based problems we face as a country if people were better educated in personal finance before going out on their own.  This could be helped dramatically if we had more competition in education instead of the public school monopolies that most communities are stuck with. 

This could be achieved by a variety of ways such as school vouchers or a dollar for dollar tax credit for education expenses.  Even with our current public school system, if a parent could at least decide to shift their funds to any school in the state, this should help foster changes as at least it would force the existing public schools to have accountability to the parents as the parents would be able to move their children to other schools that better serve their needs.

Bob Barr: A Real Choice Video

The Bob Barr campaign has released a new video that is a video montage of statements Obama and McCain have said regarding different issues along with statements Barr have said and how he is different from both of them.  There are many clips of the different media shows that he has appeared on so far, showing how much coverage he has received so far…

Below is a video response from former Vermont Libertarian Party chair, Hardy Machia…

Supreme Court Strengthens the 2nd Amendment

Great news!  The Supreme Court has ruled 5-4 to strike down the DC 32 year old ban on handguns

This ruling has helped to secure the right of individuals to own guns for self-defense and hunting.  This ruling has been said to be the Supreme Court’s first major pronouncement on gun rights in US History. Below is a video about the ruling…

I firmly believe that in order for people to remain free and safe we must ensure that the right for individuals to possess weapons is fully protected.

I believe that this right must be upheld to ensure that our governments don’t go too far… a country’s people must be able to defend themselves from their own government, if needed.

I also believe that in order for people to remain safe, they must be able to protect themselves from real criminals that wish to rob or hurt them.  It has been said by many criminals that their biggest fear when breaking into someone’s house is whether or not the occupant will be armed. They fear that more than being arrested.

I wouldn’t be surprised that deep down, most anti-gun rights people feel the same way… how many cars in front of homes do you see have bumper stickers that read, “We don’t believe in guns” or “Weapon Free Household”.  I haven’t seen any… my guess is that while there are a lot of people opposed to guns, they still feel a little better knowing that a potential criminal doesn’t know that.

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